Mereo selects PE Susquehanna house as main sponsor as it plans to launch version 1.1

Brian Duperreault’s reinsurance startup Mereo has secured the backing of Susquehanna as its lead investor and is working to close on its roughly $1 billion equity package to launch on Jan. 1, this publication can reveal.

The sources said former Securis and IQUW executive Neil Strong will become president and CEO of Mereo ILS, while former Fidelis executive Richard Holden will become deputy CEO as the start-up builds its leadership team ahead of launch.

Reinsurance start-ups have struggled in a fundraising desert over the past two years as PE houses have held back due to concerns about exits, the ability to create value in the reinsurance franchise and concerns about insurers’ control over catastrophe risk. This is despite reinsurers posting ROEs in the 20s and 30s during an 18-month period of above-average returns.

However, Mereo is slowly approaching the starting line, a year after the publication revealed that former AIG CEO Marsh McLennan and Ace Duperreault were planning to return as executive chairman of the company.

The sources said Mereo was also close to securing backing from a number of strategic partners and had been in active talks with a number of other potential financial investors, including hedge funds, PE firms and family offices.

Susquehanna is a quantitative trading firm that includes PE and venture capital funds to back Mereo.

As revealed in December, Mereo’s CEO is former Aegis London boss David Croom-Johnson, who retired from Lloyd’s top decile in 2022 after seven years in the role. He will also initially be CEO of the Bermuda-based Class 3B reinsurer.

It is known that in addition to the planned launch on January 1, Mereo intends to launch the ILS fund on the first day.

Mereo has a preliminary financial strength rating of A- from AM Best and, in preparation for securing a final rating and seeking Bermuda Monetary Authority approval for the launch, has retained a number of advisors, including Appleby, Wilkie Farr, EY and SRS. The company has already worked with Kinmont and Price Forbes Re’s capital markets unit on the capital raising.

Other team members include former Hamilton CFO Jonathan Reiss, who will become CFO upon launch while continuing his role at SRS in Bermuda. Lawrence Minicone will serve as chief investment officer and Jason Miller will become chief commercial officer.

JLT veteran Derek Walsh will become general counsel, and Federico Waisman will become chief analytics and risk officer.

We are talking exclusively to this publication Ahead of last year’s Monte Carlo, executive chairman Duperreault said the start-up would focus on “insurance, insurance, insurance.”

As previously reported, Mereo is understood to be looking to launch in around 20-30 business classes, creating a highly diversified book. This would include a portfolio of classes such as auto, workers’ compensation, professional liability, commercial real estate, casualty, crop, marine, surety, energy, representative and surety, medical, cyber and A&H.

Many start-ups that have tried to capitalize on the dislocation of the reinsurance market after years of poor performance have repeatedly delayed their launch or abandoned their operations altogether. John Doucette has shelved his plans and joined MGA Amynta.

Chris Fagan and his former Catalina colleague Mayur Patel were still working on their startup, as were former Axis CEO Steve Arora and retired Hannover Re CEO Willy Zeller.

However, in all cases, fundraising has been difficult and deadlines have been extended.

Oak Re’s newest start-up player Cathal Carr has secured Lloyd’s approval on 1 January, but that is conditional on a capital raise that Evercore is currently pursuing.

Mereo declined to comment.